IFC loan: Due diligence was shoddy - Prempeh

THE $1BILLION loan agreement secured by the Kufuor Administration through the International Financial Consortium (IFC) has suffered a crisis of confidence because of “professional shoddiness and a failure to do proper due diligence”, Dr. Henry Kwasi Prempeh, Director of Legal Policy and Governance of the Centre for Democratic Development(CDD), and regular visitor to Ghanaweb's discussion forum "Say It Loud" has said.

“I have said that if this deal is genuine, then professional shoddiness and a failure to do proper due diligence has done great injustice to the deal.” He said the documents covering the loan agreement, which he described, as a “piece of paper”, would fail to pass the most elementary requirement of what a legal agreement should be, noting: “As a legal document, I don’t think the piece of paper that was passed around Parliament would pass even the “first blush” test of what a legal agreement ought to look like”.

Contributing on a discussion forum on GhanaWeb, the pro-Ghana international website, Dr. Prempeh said if a careful, meticulous job had been done in terms of proper due diligence it would have help clear the clouds of doubt and suspicion hanging over the agreement.

In previous editions, the National Concord had reported, armed with documentary evidence that at the time the $1 billion IFC loan agreement was passed by Parliament in July this year after initial clearance by the Finance Committee of Parliament, the Bank of Ghana (BOG) had not completed its due diligence check on the IFC.

The only information that was made available to Parliament was the Curriculum Vitae of two of its board members. As at the time Parliament was going on recess, the BOG was still coordinating the due diligence check through Dun and Bradstreet, a US based establishment reputed in due diligence checks (Reader should please stay in touch for reactions from the BOG).

Dr. Prempeh said a cursory look at the archives of the Attorney General’s department in terms of loan documentation would be enough to satisfy anybody that proper, professional work was not done on the IFC loan agreement.

But that is no excuse for not doing a professionally acceptable and decent job, both in terms of the legal documentation and the requisite due diligence.

“A cursory look into the archives of the Attorney General’s department would no doubt have revealed the woeful inadequacy and unprofessionalism of the paper that was passed off as a loan agreement. That is my opinion of the matter.”

He said operatives of the underworld such as the Mafia strain every nerve to ensure that agreements they enter into are above board and without the possibility of any scam being detected and said the government should have taken similar precautions.

“Even the Mafia, when they do deals on the market (as I bet they do in all kinds of guises), make sure to hire the best lawyers and investment advisors/bankers, so that, at the very least, the legal and other supporting documentation on the deal will not give the transaction away as a scam or anything of the sort.

I do not believe the end justifies the means. If this “IFC” loan is genuine or turns out to be so; so good for all of us,” he said.